• Crude Oil prices tumbled about 7% on Monday after China's financial hub of Shanghai launched a lockdown to curb a surge in COVID-19 infections, prompting renewed fears of demand destruction. 
• Brent crude futures fell $8.17, or 6.8%, to settle at $112.48 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $7.94, or about 7%, to settle at $105.96 a barrel. Crude futures have been volatile since Russia's invasion of Ukraine in late February. Last week, Brent gained nearly 12%, while WTI rose almost 9%. 
• Shanghai has entered a two-stage lockdown of 26 million people on Monday in an attempt to curb the spread of COVID-19. Officials closed bridges and tunnels and restricted highway traffic. Andrew Lipow, president of Lipow Oil Associates in Houston said that the fear that the lockdowns could spread combined with a sell-off has resulted in further decline of the market. 
• The news impacted the global oil market because China is the world´s biggest crude consumer. The nation uses around 15Mn barrels per day, and imported 10.3Mn barrels per day in 2021, according to Andy Lipow, president of Lipow Oil Associates. However, in light of the renewed lockdown restrictions, oil demand in China, the largest crude importer globally, is expected to be 800,000 barrels per day (bpd) softer than usual in April, said Bjarne Schieldrop, chief commodities analyst at SEB bank. 
• Hopes for progress in peace negotiations between Russia and Ukraine, which could start in Turkey on Tuesday, also weighed on prices. However, analysts expect more bullish sentiment when the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, meet on Thursday to discuss a planned 432,000-bpd increase to production quotas.

(Source: Reuters)

• The U.S. Treasury on Monday proposed a new mechanism to comply with and enforce a 15% global corporate minimum tax agreed to last year by 136 countries, partly by denying deductions for taxes paid in jurisdictions with lower rates. 
• The new Undertaxed Profits Rule proposed as part of President Joe Biden's fiscal 2023 budget plan would replace the current U.S. Base Erosion Anti-Abuse Tax (BEAT) with a new system that would act as a "top-up tax" to ensure that multinational corporations pay an effective tax rate of at least 15%, the Treasury said in budget documents released on Monday. The Treasury said in its revenue proposals that the undertaxed profits rule would apply to entities with more than $850Mn in global annual revenue in at least two of the last four years. 
• The global minimum tax deal negotiated through the Organization for Economic Cooperation and Development (OECD) is aimed at ending a downward competitive spiral of corporate rates and an erosion of government revenues while denying advantages to tax-haven countries. 
• A key feature of Treasury's proposed rule is that it would generate additional revenue by denying deductions to companies to the extent that they are paying a tax rate below 15%.

(Source: Reuters & Financial Post)

• Jamaica’s total spending on imports and earnings from exports for the period January to November 2021 increased by 25.2% and 20.2%, respectively, relative to the similar period in 2020, as reported by the Statistical Institute of Jamaica (STATIN). 
• Expenditure on imports for the period amounted to US$5,389.4Mn compared to US$4,303.8Mn for the corresponding 2020 review period. The increase in imports was mainly attributed to higher imports of “Fuels and Lubricants” (68.3%), “Raw Materials/Intermediate Goods” (23.3%), and “Consumer Goods” (11.4%). 
• The prices for “Fuels and Lubricants” have however increased since November 2021 owing to the geopolitical tensions between Russia and Ukraine, and as such we expect increased spending on imports from this category in upcoming reports. 
• Earnings from total exports for January to November 2021 were valued at US$1,336.6Mn; 20.2% above the US$1,111.6Mn earned in the comparable review period. The increase in exports was driven mainly by higher exports of “Mineral Fuels” which rose by 94.2%. 
• The main trading partners for imports during the review period, were USA, Brazil, China, Japan and Turkey. Imports from these countries rose by 28.4% to US$3,385.9Mn, accounting for 62.8% of total expenditure. This increase was due chiefly to higher imports of crude oil from Brazil and motor spirit from the USA. 
• Jamaica’s top five exports partners for the 2021 review period were the USA, the Netherlands, Canada, the United Kingdom and the Russian Federation. Earnings from these countries increased by 17.2% to US$964.7Mn, accounting for 72.2% of total exports. The increase was due mainly to higher exports of bunker C fuel oil to the USA and Alumina to the Netherlands.

(Source: STATIN and NCBCM)

• Fitch Solutions revised its 2022 growth forecast for the Dominican Republic to 4.5%, from 4.8% previously, as the Russian invasion of Ukraine will spur inflation and weaken external demand; however, the economy is still expected to outperform regional peers. While real GDP rose 11.1% y-o-y in Q4 2021, the Russian invasion of Ukraine on February 24 will keep commodity prices elevated and disrupt global trade, limiting Dom Rep’s growth in the quarters ahead. 
• Consequently, private consumption growth will slow to 4.3% in 2022, down from 6.6% in 2021, as rising prices limit purchasing power. From 2017 to 2021, private consumption accounted for 68.3% of GDP on average and was a major catalyst of the economic rebound in 2021. The Russian invasion of Ukraine will weaken global growth, constraining external demand for Dom Rep’s goods and services exports over the coming quarters. 
• While total investment is expected to increase by 5.2% in 2022, this is a significant reduction from the 22.1% expansion recorded in 2021. This will be due to higher borrowing costs and greater risk aversion among global investors.  
• The Banco Central De La República Dominicana (BCRD) began a rate hiking cycle in Q4 2021 and has since raised rates by 200 basis points, to the current policy rate of 5.00%. Fitch forecasts that the BCRD will increase its policy interest rate to 7.00% by end-2022 which, coupled with its more hawkish outlook for the US Federal Reserve, will lift borrowing costs and weaken business investment in the Dominican Republic.

 (Source: Fitch Solutions)

• Dr Irfaan Ali has said that his government intends to use the examples of countries such as the United Arab Emirates (UAE) and best practices from countries across the world to enhance and develop Guyana. 
• President Ali explains that Guyana is not competing with anyone, instead, he and his government want to use the best examples, best practices to do the best they can do for their citizens and the people of the region—giving them a better shot at life, a better shot at prosperity, and ensuring that revenues help to build an economy that reduces inequality and disparity. 
• The Head of State related that the UAE has taught the world how to utilise oil revenues to diversify its economy and ensure that there is a system of equality, improved governance services, and state-of-the-art infrastructure. Similarly, Guyana wants to use the resources that it will gain from oil revenues to build an economy that is resilient, broad, and well-diversified. 
• Guyana is working closely with the UAE in several areas, including infrastructure development, improving efficiency in governance systems, and technology transfer, to achieve this goal. The two states are collaborating on an investment agreement that would make it easier for investors from the UAE to invest in Guyana.

 (Source: Guyana Chronicle)

• Crude prices slid nearly 2% on Thursday after the European Union (EU) did not agree on a plan to boycott Russian oil and as the United States and its allies discussed a possible further coordinated release of oil from storage. 
• While the EU did not agree to the boycott, Russia's invasion of Ukraine on Feb. 24 has prompted a pledge by the Union to slash reliance on Russian fossil fuels by hiking imports from other countries and quickly expanding renewable energy. 
• Brent futures fell $1.98, or 1.7%, to $119.62 a barrel by 1:38 p.m. EDT (1738 GMT). U.S. West Texas Intermediate (WTI) crude fell $2.00, or 1.7%, to $112.93. On Wednesday, both benchmarks closed at their highest since March 8.

(Source: Reuters)

•  The United States, the European Union and largely western allies have blocked Belarus' bid to join the World Trade Organization, saying its complicity in Russia's invasion of Ukraine makes it unfit for membership in the global trade group. 
• G7 countries and allies have already stripped Moscow of its privileged trade treatment at the WTO, known as "most favoured nation" status, clearing the way for them to hit Russian imports with higher tariffs or ban them entirely. 
• The western group halted work on Belarus' WTO accession process after President Alexander Lukashenko crushed protests following his 2020 re-election that opponents say was fraudulent. 
• The group on Thursday said in a document filed at the WTO that it strongly condemned Russia's unprovoked military aggression against Ukraine, enabled by Belarus. Russia, which calls its actions in Ukraine a special operation, has used Belarusian territory to launch its attack.

(Source: Reuters)

• Following its most successful year on record, with consolidated revenue of $25.02Mn across 10 countries and territories, Jamaica Producers Group Limited (JP) has acquired Miami Freight and Shipping Company (MFSC) through its UK subsidiary JP Shipping Services Limited. 
• Since disposing of a 22.1 per cent stake in SAJE Logistics Infrastructure Limited in 2020, JP has been on an acquisition path as it recently acquired UK-based Geest Line Limited (GLL), Spanish-based Co Beverage Lab SL, and Dominican-based Grupo Alaska. 
• MFSC has been engaged in the freight handling, logistics, and shipping business for more than 40 years, with more than 20 years spent shipping to Jamaica and 11 other territories in the Caribbean. The company’s services include on-site packaging and crating, cargo consolidation, nationwide cargo pickup, and shipping of specialised cargo such as cars, trucks, excavators and other machinery. 
• JP continues to act on opportunities for growth in commercial cargo handling, e-commerce shipping, and export facilitation. The acquisition of MFSC is in line with this vision. Going forward the addition of this new subsidiary is expected to increase its market share in the US to the Caribbean shipping business, which augurs well for both revenue and net profit growth.

(Source: JP website and NCBCM)

• Prime Minister Roosevelt Skerrit has expressed confidence in his government’s target of a $700Mn economic return from the agricultural sector within the next eight years. 
• Currently, agriculture in Dominica contributes approximately $230Mn to the economy based on figures from the Eastern Caribbean Central Bank (ECCB). However, Skerrit and his government plan to keep growing the sector to a level where it can triple that amount by 2030. 
• The Prime Minister, who is also the Minister for Finance, disclosed that the government will assist those in the sector to increase their productive capacity and efficiency by incentivizing more women and young people to get involved in agriculture as a full-time profession. 
• Skerrit also pledged, on behalf of his government, to help local farmers improve efficiency through the application of technology to include farm automation, digitalisation, and other more familiar methods such as hydroponics, crop rotation, and greenhouse technologies. He further announced that the government will continue its support of farmers through the provision of financial support, equipment, and supplies and the construction of farm access roads

 (Source: Dominica News Online)

• The International Monetary Fund (IMF) revealed that the Bahamas exceeded its economic growth projections for 2021. The country had achieved more than double the projected gross domestic product (GDP) growth with actual economic output expanding by 5.5% relative to the forecasted 2%. 
• However, the faster-than-anticipated reflation of the Bahamian economy following the COVID-19 pandemic, coupled with the impact from soaring global inflation and uncertainties caused by Russia’s invasion of Ukraine, has resulted in the IMF reducing 2022’s growth forecast by two percentage points from 8 per cent to 6 per cent. However, GDP growth estimates for 2023 have been maintained at 4.1%. 
• The Bahamas’ tourism-dependent economy was hit hard by the COVID-19 pandemic, which came on the heels of the devastation caused by Hurricane Dorian. While the economy is recovering strongly, the pandemic has exacted a tragic human and social toll and caused a significant weakening in public finances. 
• Coupled with an increase in construction activity, the output is estimated to have expanded by around 5.5% last year. Real GDP growth is estimated at around 6% this year, although a full recovery to pre-pandemic levels is not expected before the end of 2023. Furthermore, inflationary pressures are building in line with global developments and are expected to ease only gradually.  
• Risks to the outlook are however significant. A re-intensification of the pandemic cannot be discarded. With about 40 per cent of the population fully vaccinated, the emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions. Alternatively, rising cases in source countries could dissuade travel and lead to a renewed decline in tourism. Higher food and oil prices, because of the effects of the war in Ukraine, could erode consumer demand and impose a particularly heavy burden on the vulnerable.

 (Sources: IMF and The Tribune)